Why keeping your books up-to-date is necessary
Staying organized financially means recording new transactions as they happen and updating outdated information. This gives a more accurate overview of how the business is doing overall and informs future decisions. Our transaction teams does this in real-time so it’s not a time-consuming process and ends up saving time when producing financial statements and filing taxes.
Similar to how a car needs maintenance, not keeping up means a business is constantly having to be ready for a breakdown. Here are uses for up-to-date accounting.
Expense management. Whether large or small, every business expense needs an entry. When bookkeeping lags, trouble follows. Knowing how much you have spent and how much you’ve brought in is integral in making even small purchasing decisions.
Budgeting. When consistent bookkeeping is performed, businesses can see where they're tracking against the budget plan and adjust accordingly. With updated entries and an updated budget, expenses can be tracked and analyzed against the effect on cashflow on a monthly basis.
Revenue forecasting. The best way to accurately forecast is by looking at past financial statements. This comes in handy when making quarterly estimated tax payments, adding new hires, expanding physical locations, or making large equipment purchases.
Tax stress. By the time December 31 rolls around, not having to catch up means less stress for business owners. Reaching year-end without updated books costs time and money. Even when paying for accounting services, that expense is offset by last minute catch-up costs.
Financing. When seeking a business loan or to attract investors, up-to-date financial statements must be presented. Income statements, balance sheets, and cashflow statements are only a few clicks away when accounting is current.
Emergencies. If the Covid-19 pandemic taught small business owners anything, it’s that disaster preparedness is key to survival. As part of budget planning, an emergency fund can be incorporated to absorb the impact of unforeseen costs and setbacks, however, it’s nearly impossible to save up when bookkeeping is behind.
Reaping the benefits of outsourced accounting lets spreadsheets become a thing of the past without learning new software taking more of your time. When O|Miga’s team handles it all for you, your bookkeeping is always current - and ready for tax season.